06-20-07 FPAC Minutes - Laserfiche WebLink

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Authorized Investments (cont'd) • (5) Repurchase agreements (Repos)—contracts whereby a holder of securities sells the securities to an investor and agrees to repurchase them at a fixed price on a fixed date. The City in effect lends money to another party and holds the security as collateral until it is repurchased by the other party. (6) Money market mutual funds—shares of a Minnesota joint powers investment trust whose investments are restricted to securities described in (1) through (5) above, or shares of an investment company that meets the requirements of Minnesota Statutes 118A.05, subd. 4. Authorized Financial Institutions The City will conduct its investment transactions with several legal, competing, reputable investment securities dealers or banks located in Minnesota. The City will obtain a completed "Notification to Broker and Certification by Broker" statement of investment restrictions from each dealer in accordance with Minnesota Statutes 118A.04. Speculative Investments Not Allowed The City will not purchase investments which, at the time of investment, are not intended to be held to maturity, or which the City would not be able to hold to maturity because of cash flow requirements. This does not mean that an investment cannot be sold prior to maturity. The City will not invest in securities, other than money market mutual funds, without a fixed maturity and fixed interest or discount rate. Maximum Maturities The City will attempt to match its investments with cash flow needs. Unless directly matched to a specific cash flow, the City will not invest in securities maturing more than ten years from the date of purchase. Terms of Transactions All investment transactions will be "delivery vs. payment," which means that payment for the investment will be made only upon delivery of the security to the safekeeping institution designated by the City. This type of transaction provides the maximum amount of security to the City. 3